Tax havens are the driving factor in illicit politics and huge tax losses – problem lies overseas
Nicholas Shaxson 19, cofounder of the Balanced Economy Project, an anti-monopoly organization, and writes regularly for the Financial Times, The Economist, and African Energy, 9/2019, “The billions attracted by tax havens do harm to sending and receiving nations alike,” https://www.imf.org/en/Publications/fandd/issues/2019/09/tackling-global-tax-havens-shaxon#:~:text=Tax%20havens%20collectively%20cost%20governments,not%2Dso%2Dlegal%20means //ST
Political damage, while unquantifiable, must be added to the charge sheet: most centrally, tax havens provide hiding places for the illicit activities of elites who use them, at the expense of the less powerful majority. Tax havens defend themselves as “tax neutral” conduits helping international finance and investment flow smoothly. But while the benefits for the private players involved are evident, the same may not be true for the world as a whole; it is now widely accepted that in addition to tax losses, allowing capital to flow freely across borders carries risks, including the danger of financial instability in emerging market economies.
As a general rule, the wealthier the individual and the larger the multinational corporation—some have hundreds of subsidiaries offshore—the more deeply they are embedded in the offshore system and the more vigorously they defend it. Powerful governments also have a stake; most major havens are located in advanced economies or their territories. The Tax Justice Network’s Corporate Tax Haven Index ranks the top three as the British Virgin Islands, Bermuda, and the Cayman Islands—all British overseas territories. The organization’s Financial Secrecy Index ranks Switzerland, the United States, and the Cayman Islands as the top three jurisdictions for private wealth.